NEW YORK (Reuters) – JPMorgan Chase & Co chief executive Jamie Dimon said on Monday that the bank held around $ 500 billion in cash, allowing it to benefit from higher interest rates.
“We have effectively stored more and more cash, waiting for opportunities to invest at higher rates,” Dimon said at a virtual conference hosted by Morgan Stanley. “Our balance sheet is therefore positioned (to) benefit from the rate hike.”
Dimon, who heads America’s largest bank by assets, said he expects rising inflation to lead to higher interest rates over the next 9 months.
“I think you’re going to have a very, very strong economy as well,” which will also benefit retail banking, he said. “We try to take all of this into consideration (when) we run the balance sheet.”
The Federal Reserve is expected to issue a statement on Wednesday that will indicate when the US central bank is likely to start cutting its unprecedented monetary stimulus.
The Fed’s favorite inflation indicator, the basic personal consumption expenditure price index, jumped in April to 3.1%, its highest annual rate since July 1992.
Dimon also forecast that the bank’s bond and equity trading division will generate $ 6 billion in revenue this quarter, and his investment bank could report one of its best quarters.
“I would just use a number as a 20% increase over the previous year and the previous quarter. It could be 15% to 20%,” Dimon said.
Dimon said the investment bank is benefiting from several large deals that “may or may not close” this quarter, as well as strong client activity in the equity and debt capital markets and mergers and acquisitions.
(Reporting by Elizabeth Dilts Marshall, editing by Bernadette Baum and Nick Zieminski)